Obour Land for Food Industries recorded net sales of EGP 2.044bn in the first nine months (9M) of 2020, posting a growth of 6% compared to 9M 2019. About EGP 1.9bn of total sales was generated from white cheese sales, while the rest EGP 137m came from other segments.
The company witnessed a strong performance in terms of white cheese sales the third quarter (Q3) of the year, recording a 5% year-on-year (y-o-y) increase. Obour Land also saw a 9% revenue increase. This was mainly driven by the increase in white cheese sales in addition to a 2% increase in white cheese average prices.
Moreover, the gross profit margin has improved significantly in 2020 due to the instalment of three new production lines at the beginning of the year, lower packaging costs, and sourcing cheap raw materials as the company took advantage of the plunge in prices of all raw materials in the aftermath of the COVID-19 pandemic.
Ashraf Hamed Sherif, Vice Chairperson of Obour Land, said that the Q3 of 2020 was a strong period for the company in terms of revenues, sales, and profit margin, despite the unusual market conditions in the aftermath of the COVID-19 pandemic.
In addition, the milk segment in the company continued its surge in sales achieving almost two-fold increase in 3Q 2020, with revenues surging 150% reaching EGP 45m compared to EGP 18m in 3Q 2019.
Obour Land will support the company’s presence in the milk market by introducing a new “flavoured milk” product to diversify its milk product portfolio and to target a younger age group.
The juice segment has been affected negatively by the COVID-19 pandemic restrictions and its revenues fell 24% in 3Q 2020. The management is going to develop a new plan for the juice segment in 2021.
The processed cheese has also witnessed a surge in sales and revenues recording EGP 5.5m in 3Q 2020, marking a more than three-fold increase compared to EGP 1.3m in 3Q 2019. The surge in the processed cheese sales was a result of the strong performance of the new glass-jar product coupled by the introduction of the new processed cheese product “Mafrooda” which was launched at the end of September.
“We expect the surge to continue achieving much higher growth rates due to our focus on the new Tetra Pak product “Mafrooda” which will shift this segment to a whole new level,” said Sherif.
Obour Land’s net profit edged down 0.5% to reach EGP 239.5m during 9M 2020, mainly due to the one-offs revenues from FX gains and sale of assets in 9M 2019. The company achieved a net profit margin of 11.7% for 9M 2020, a decrease of 0.8bps y-o-y.